Rent Collection & Expense

DistributionHomes without Mortgages

Seabird Island Band

Steps in Process

• #1: AR charges/records rent to units based on set rent by cost center on monthly basis

• #2: AP records all expenses for each household by object code & cost center based on approved invoices

Steps Continued

• #3: Finance analyst reallocates contribution reserves monthly based on rent charge:• Contingency Reserve (5% of rent)

• Replacement Reserve (29% of rent)

• Maintenance Reserve (27% of rent)

The ‘Reserves’

• The Reserves are reallocated to a balance sheet item similar to how the replacement reserve is set up (social housing)

• Expenses related to the reserves are coded to the balance sheet items by cost center

• These reserves are kept separate from the social housing reserves

What are the Reserves used for?

• Maintenance Reserve• Regular maintenance items throughout year

• Replacement Reserve• Larger replacement items; appliances, windows, etc

• Contingency Reserve• Anything over and above the reserve for maintenance/replacement

(offset)

***IMPORTANT: Only use what is available. Carry over each year.

Audit

• The 3 reserves (contingency, replacement, maintenance) require a working paper• Breakdown of all contributions and expenses

• Reconcile to ending balance sheet of each reserve by cost center

Viability

• No deficit

• Determination of set rents should factor in all expenses and contingencies to ensure program is viable

Questions?

• Further questions, contact Nigel Selvadurai, Finance Supervisor for SIB

nigelselvadurai@seabirdisland.ca

Or

604-796-6815